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In recent years, decentralized exchanges (DEXs) have emerged as a compelling alternative to traditional centralized trading platforms. Built on the foundation of automated market makers (AMMs), DEXs have established themselves as significant players within the industry, capturing trade volume on blue chip and long tail assets.
This blog post delves into the distinctions between Integral’s AMMs and conventional AMMs, as well as the unique features that set Integral SIZE apart for traders and LPs.
Capital Efficiency:
The primary distinction between our AMMs and traditional AMMs lies in its emphasis on capital efficiency. Conventional AMMs, including those with concentrated liquidity, frequently suffer from liquidity constraints for large orders. This is because liquidity is always priced on a curve, leading to larger impact for larger orders.
Integral SIZE, however, is specifically engineered to facilitate the execution of sizable transactions without any slippage. This is because the sole constraint on the magnitude of a trade in Integral SIZE is the available liquidity within a SIZE pool. This design ensures that traders can execute large orders seamlessly, bypassing the limitations often encountered on other platforms.
For traders, this means that larger trades can be executed, even in pairs with smaller liquidity bases. For projects, this means you can more easily provision liquidity for large traders without needing much capital. For LPs, it means higher utilization and fees.
No Slippage or Price Impact:
Integral also provides a trading experience devoid of slippage or price impact. This feat is accomplished through processing trades at an oracle price. For example, Integral SIZE uses a Uniswap oracle, executing trades at the 30-minute time-weighted average price (TWAP). This approach guarantees that traders can execute substantial orders without negative price impact or slippage, a frequent issue on alternative DEXs.
This system also means that LPs experience mean-zero impermanent loss as trades between assets balance out over time.
MEV Resistance
By using non-atomic swaps, Integral SIZE trades are impervious to various toxic MEV attacks, such as sandwich attacks. The 30-minute TWAP execution automatically renders most malicious MEV infeasible, safeguarding both traders and liquidity providers (LPs) from potential losses.
Instead of worrying about triple checking your slippage setting, trading on SIZE will always have zero slippage and no MEV attacks.
Let’s Continue Innovation in DEXs
The past year in crypto has shown the importance of decentralized and non-custodial systems. Decentralized exchanges have also proven their worth, even as debates rage around the best design and who is profiting the most. At Integral, we think now is the time to continue innovation in the DEX space. Our contributions to new ideas for DEXs and the rest of DeFi will continue.
